Most
people in the United States who receive medical services have
their medical costs paid, at least in part, by private health
insurers or a government insurer such as Medicare. When the
health care providers send their bills to the patient's
private or government health insurer, those insurers very
frequently do not pay 100 percent of what the medical care
providers charge; instead, they pay a reduced amount and the
difference between the amount charged and the amount paid is
often written off by the health care providers. Under
Maryland law, assuming other conditions are met, a plaintiff
who brings a negligence action is allowed to put into
evidence the bill submitted by the health care provider and
the defendant is prohibited from bringing to the attention of
the jury the fact that a portion of the bill has been
written-off. See Lockshin v. Semsker, 412 Md. 257,
284-85 (2010). Nevertheless, as a result of Maryland Code
(1974, 2013 Repl. Vol.), Courts and Judicial Proceedings
Article (Cts. & Jud. Proc.) § 3-2A-09 (hereinafter
"the Maryland Act"), a defendant against whom a
verdict for past medical expenses has been entered may file a
post-trial motion to reduce the judgment by the amount of the
write-offs. Lockshin, 412 Md. at
285-86.[1] The Maryland Act provides, in pertinent
part:

(d) Medical expenses . . .

(1) A verdict for past medical expenses shall be limited to:

(i) The total amount of past medical expenses paid by or on
behalf of the plaintiff; and

(ii) The total amount of past medical expenses incurred but
not paid by or on behalf of the plaintiff for which the
plaintiff or another person on behalf of the plaintiff is
obligated to pay.

Cts. & Jud. Proc. § 3-2A-09(d)(1).

The
obvious intent of the Maryland Act was to prevent the victim
of a tort from recovering a verdict for past medical expenses
that neither the plaintiff, nor anyone acting on the
plaintiff's behalf, ever paid or was obligated to pay. In
other words, insofar as past medical expenses are concerned,
the Maryland General Assembly wanted to prevent the plaintiff
from receiving a windfall by recovering for medical bills
that were never actually incurred.

In the
case sub judice, the Circuit Court for Baltimore
County applied the Maryland Act based on the following
undisputed facts. Barbara Bromwell, between June 1, 2011 and
June 29, 2013, received medical bills from various health
care providers that totaled $451, 956.00. At the time she
received those bills, she was eligible to receive Medicare
benefits as well as benefits from CareFirst BlueCross
BlueShield (hereinafter "CareFirst"), her private
health care insurer. Medicare made conditional payments to
Ms. Bromwell of $157, 730.75; CareFirst also paid part of the
bills that were submitted, and Ms. Bromwell and/or her
personal representative paid $47, 609.00 in out-of-pocket
expenses. But, taking into consideration $62, 941.70 in
write-offs, by Medicare and CareFirst, the total amount Ms.
Bromwell, or her insurers or anyone else either paid, or were
obligated to pay, was $389, 014.30 ($451, 956.00 - $62,
941.70).

After
Ms. Bromwell's death, Kathy Netro, personal
representative of the estate of Barbara Bromwell, filed a
survival action in the Circuit Court for Baltimore County
against Greater Baltimore Medical Center (hereinafter
"GBMC") and others.[2] When that case was tried before a
jury, the personal representative proved that $451, 956.00
worth of medical bills were sent to Ms. Bromwell (or her
representative) as a result of the medical malpractice
committed by GBMC. On July 22, 2016, the jury returned a
verdict against GBMC and in favor of the personal
representative for past medical expenses in the amount of
$451, 956.00. The jury found, however, that GBMC's
negligence did not cause the death of Ms. Bromwell and for
that reason it rejected the wrongful death claims brought
against GBMC by Ms. Bromwell's three surviving adult
children. Additionally, the jury awarded zero dollars in
regard to the personal representative's claim for
non-economic damages. After judgment was entered on July 22,
2016, in conformity with the jury verdicts, the personal
representative along with Ms. Bromwell's surviving
children, on August 1, 2016, filed a motion for new trial or,
in the alternative, an additur.

On
August 2, 2016, which was eleven days after the judgment was
entered, GBMC filed a motion to "reduce
verdict/judgment" pursuant to the Maryland Act. The
trial court denied plaintiffs' motion for new trial or,
in the alternative, an additur on August 23, 2016.

Meanwhile,
the personal representative of Ms. Bromwell's estate
filed an opposition to GBMC's motion to reduce the
verdict/judgment. The personal representative contended that
provisions set forth in the Medicare Secondary Payer Act
(hereinafter "the MSP"), a federal law, preempted
the Maryland Act because, if the provisions of the Maryland
Act did not exist, Medicare would receive approximately $18,
500.00 more in repayment of the $157, 730.75 conditionally
paid by Medicare, than it would receive if the Maryland Act
was enforced. Her preemption argument is based on regulations
that are set forth in 42 C.F.R. (Code of Federal Regulations)
§ 411.37, which govern how the MSP should be
implemented. Section 411.37 reads, in pertinent part:

(a) Recovery against the party that received payment-

(1) General Rule. Medicare reduces its recovery to take
account of the cost of procuring the judgment or settlement,
as provided in this section, if-

(i) Procurement costs are incurred because the claim is
disputed; and

(ii) Those costs are borne by the party against which CMS
[Centers for Medicare and Medicaid Services] seeks to
recover.

(c) Medicare payments are less than the judgment or
settlement amount. If Medicare payments are less than the
judgment or settlement amount, the recovery is computed as
follows:

(1) Determine the ratio of the procurement costs to the total
judgment or settlement payment.

(2) Apply the ratio to the Medicare payment. The product is
the Medicare share of procurement costs.

(3) Subtract the Medicare share of procurement costs from the
Medicare payments. The remainder is the Medicare recovery
amount.

To
illustrate how C.F.R. § 411.37(c) operates, consider the
following hypothetical: A plaintiff incurs $100, 000.00 in
procurement costs (legal fees, bills from experts and other
costs) in order to obtain a $500, 000.00 verdict for past
medical expenses in a negligence case in which Medicare has
made conditional payments of $250, 000.00. In that
hypothetical, Medicare's pro rata share of the
procurement costs would be 50% of $100, 000.00 or $50,
000.00. But, if the total judgment is reduced from $500,
000.00 to $400, 000.00 for some reason, such as implementing
the Maryland Act, Medicare's pro rata share of the
procurement costs would be 62.5% ($250, 000.00 is 62.5% of
$400, 000.00) and Medicare would have to pay $62, 500.00
toward the procurement costs rather than $50, 000.00.

If, in
the case sub judice, the judgment stayed at $451,
956.00, Medicare would only have to pay about 34.90% of the
procurement costs because $157, 730.75 is approximately
34.90% of $451, 956.00. But, if the judgment were reduced
pursuant to the Maryland Act, Medicare would have to pay
approximately 40.55% of the fixed procurement costs inasmuch
as $157, 730.75 is about 40.55% of $389, 014.30. That higher
pro rata share means, according to appellant, that Medicare
would have to pay about $18, 500.00 more toward procurement
costs than it would if the trial judge had not reduced the
judgment pursuant to the Maryland Act.[3]

In the
trial court, appellant argued that the Maryland Act should
not be applied because the MSP preempted it. According to
appellant's trial counsel, because the reduction of the
judgment meant that Medicare's share of the procurement
costs would increase, the intent of Congress would be
thwarted inasmuch as Congress intended, when it enacted the
MSP, to increase revenues to the U.S government "to the
maximum extent possible."[4]

On
October 31, 2016, the trial judge granted GBMC's
post-trial motion to reduce the judgment. In doing so, the
court rejected the personal representative's preemption
argument and, in accordance with the Maryland Act, the
judgment was reduced to $389, 014.30. The personal
representative filed this timely appeal and raised one
question, which she phrases as follows:

Do the Medicare Secondary Payer ("MSP") provisions
of federal law preempt a state law that diminishes the
subrogation interest of the United States?

I.

MOTION
TO DISMISS APPEAL

GBMC
has filed a motion to dismiss this appeal because,
purportedly, the appellant does not have standing to protect
the rights of Medicare. According to GBMC, the personal
representative's entire purpose in filing this appeal is
to protect the interest of Medicare. GBMC argues:

This Court has made clear, as a "fundamental principle
of standing to appeal," that "an appellate court
will not entertain an appeal by one who does not have an
interest that will be affected by prosecuting the
appeal." Lopez-Sanchez v. State, 155 Md.App.
580, 595 (2004), aff&#39;d, 388 Md. 214 (2005).
Similarly, the Court of Appeals has identified standing to
appeal, i.e. "the sufficiency of an
[appellant's] interest to maintain an appeal," as a
question which the appellate ...

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